Make the mobile your nice little earner

People are making money in their spare time turning bright ideas into mobile phone applications

Last November Kostas Eleftheriou, a 25-year-old London-based entrepreneur, was standing in his bathroom after a shower when the steamed-up mirror caught his eye. “It was my eureka moment,” hee an increasing number of business-minded young people, Eleftheriou had been trying to come up with an application - or app - that users would pay to download to their iPhones. He decided that a mock steam that you can wipe away on your touchscreen, with an accompanying squeaky noise, was a winner because “it would only take seven days to make and is so simple my mum would understand it”. He called it iSteam and it has already netted his company more than £40,000. Not bad for a week’s work.

There was a time, of course, when young people seeking fame and fortune threw on pinstriped suits and headed off to the City with dreams of earning a six-figure salary. In the past few months, however, the rules have changed. The City has taken to firing people en masse and a tantalising new way has emerged to earn money. All you need is a basic Mac, some decent computer skills and a killer idea . . . then the recession will look anything but grim.

Take Steve Hyde, a 29-year-old environmental scientist from London. He has a respectable day job mopping up pollution, but in his spare time he has been toiling in his bedroom designing an application that tells you where the nearest PizzaExpress is.

“I got an iPhone three or four months ago,” he explained, “and started seeing all this stuff you could download, from games to navigation tools and funny stuff. I wondered who was producing it all and it seemed it was people like me in their room upstairs, sticking stuff up for 59p a go and realising they can make real money.”

Real money could be an understatement. Since Apple launched its iPhone in June 2007, it has been catnip for geeks and stylistas alike. But it was not until July 2008, when the firm brought out a superfast 3G model that Joe Public could make cash out of it.

The new version included a feature called App Store, a sort of online market where people can peddle applications and games that will turn a phone into a flute, a pinball machine, a spirit level, a croupier’s table, a whoopee cushion or a multi-lingual translator.

At first the choice was limited and the downloads were few but, a year on, the number of apps has reached 30,000 and worldwide downloads are poised to exceed 1 billion.

It is estimated that the App Store does three sales a second and could become more successful than iTunes, its sister online music store. Users of iPhones buy twice as many apps - more than 50 each on average - as iPod owners buy songs. It is being touted as the biggest techie gold rush since the birth pangs of mass internet use in the mid1990s.

BlackBerry, Google and Nokia are all in various stages of development with their own versions of App Store, which will make the phenomenon truly global.

“What’s exciting about the App Store is that it’s so democratic,” said David Rowan, editor of Wired, the technology magazine. “If you’ve got an idea and know something about [computer] coding you could have a shot at making large amounts of money. You can make £200 a week with a moderately successful application. It’s a good way to top up your income.”

Ethan Nicholas, an America programmer, was struggling to make his mortgage payments last summer so he devised a game called iShoot. “It became so successful that at one point he was earning £20,000 a day,” marvelled Rowan. “He made £500,000 in five months.”

The reason why so many cash-strapped techies are trying the App Store is that the start-up costs are low and the logistics easy. If you already have a Mac, all it costs is about £59 for a developer’s licence from Apple. The price of apps varies from free to more than £30, but most cost 59p - you keep 36p for every unit Apple sells on your behalf.

The cherry on the cake is that the programs are not complex video games that require millions of pounds and take years to produce. A simple successful program can take a competent technophile no time to produce. With distribution and payments sorted by Apple, it is a tantalising proposition.

“Right now what works on the iPhone are very simple, single-user applications,” said Matt Murphy, a partner at Kleiner Perkins Caufield & Byers, a venture capital firm.

Murphy, based in California, manages a $100m fund dedicated to apps for mobile phones. “Things that are cool, fun and provide instant value, work,” he said. “Anything more complicated is not ramping as fast as the lightweight stuff that you download, enjoy, get bored with and move on from.”

So if you are hoping to make a fortune, take heed. Some of the biggest hits so far include iBeer (which fills your screen up with virtual beer, then burps when you tip it out), iFart (you can guess) and Koi Pond (fish float around and you prod them with your finger. It was the store’s most-downloaded paid-for application last year).

Steve Sheraton, a former magician who created iBeer, advocated the quirky approach. “It’s up to the product’s creator to make people pick your product among all the thousands of items on the shelves,” he said. “As one of my Vaudeville magician teachers preached: ‘Be different or better, but most of all, you gotta have a gimmick’.”

That said, people have come up with plenty of apps with a more useful bent. Mainstream websites such as Facebook (the biggest hit with an estimated 5m downloads) and Google Earth have iPhone apps, but some are even more inventive. With the Betty Crocker app you can type in the contents of your fridge and it will give you handy recipe suggestions. Stylish Girl stores images of your clothes and creates ensembles for you to try, while Nike Training Club has video demonstrations of exercises you can try at the gym. Some of the most helpful apps are also the most obvious: extensive weather forecasts, bus route maps, television guides.

The key is having an original wheeze. “I got the idea for PizzaExpress because one of the first apps I saw was McFinder,” said Hyde, “which used the GPS function to find McDonald’s, and I thought there should be something for the more discerning diner. I’m not into computer programming but it seemed like something that could be done with a little interest and not much work.”

Hyde’s plan sounds positively Gordian compared with iSteam. “We launched it for free on December 29 and seven days later we had 1m downloads,” said Eleftheriou.

Does he wish he had charged money from the start “No, because the idea was to establish a big user base and now the total number of paid downloads is 110,000, which is very high.

“For the first time in many years, from when computers and games first started really, one person is able to develop stuff in their own bedroom for millions of people.”

Naturally, it is stories such as those of Nicholas and Eleftheriou that are getting amateur programmers excited. Murphy still believes that anyone can break through with a shrewd enough idea and a bit of luck.

“Despite having 30,000 applications, unknown companies can launch their app and if it’s good it will find its way up the charts,” he said. “We have a company called Pinger, which had tried some stuff on SMS [text message format] with limited success. Six weeks ago they launched iPhone apps called Textfree and Textfree lite [which allow American users to send free text messages] which hit No 1 or 2, acquiring over 50,000 users a day with no promotion or marketing. [It’s] a perfect example of a relatively level playing field.”

Level but crowded. With the App Store filling up it is getting harder to guarantee success, as four employees of this newspaper recently discovered.

“As we all had iPhones, four of us decided to have a bet and see who could dream up an application and get it on the iPhone App Store first,” said Simon Regan-Edwards, production director of The Sunday Times.

Jamie Ferguson, from our IT department, got there first with an app that correlates Ordnance Survey maps with the phone’s GPS, which proved a brief hit with ramblers.

“There was a day or two when Jamie crept above Spore, a game that its creator EA [a huge gaming firm] had spent millions on,” said Regan-Edwards. His own app - for looking at the solar system - took ages to build and has so far netted “enough to buy myself a cup of coffee every day”.

Success seems to depend upon a whimsical stroke of genius or pushing the technology to the limit. Eleftheriou says his company, GreatApps, has come up with a piece of technology that makes the iPhone not just feel where you push the screen, but how hard. “We’re building our next app around that, but it’s impossible for me to tell you any more,” he said darkly.

“Everyday people can still dream, too,” said Rowan. “It’s nice to know there’s still an exciting, innovative way to make money these days - and one that hasn’t been nationalised by Alistair Darling.”

Top downloads

Top 10 free apps (2008)

1. iPint Drink a virtual pint

2. Facebook Social networking site

3. Google Earth Satellite images of planet

4. Lightsaber Unleashed You are Luke Skywalker

5. Labyrinth Lite Edition Guide a steel ball game

6. Remote Turns phone into TV control

7. Tap Tap Revenge Dance with your fingers

8. Touch Hockey Arcade game

9. Flashlight Screen becomes a torch

10. Shazam Names songs being played

Top 10 paid-for apps (2008)

1. Koi Pond Makes tropical fish portable

2. Crash Bandicoot Racing game. Tilt to steer

3. Super Monkey Ball Primate adventure game

4. Moto Chaser Two-wheeled racing

5. PocketGuitar No strings attached

6. Texas Hold’em Poker game

7. allRadio Global radio receiver

8. Cro-Mag Rally Cavemen kart racing

9. iChalky Dancing stick man

10. Air Hockey Arcade game